Replies to post #75765 on Biotech Values

[jbog]

Dew,

After reading the Mckinsey report the only long term solution that I see would be for the government to take such an dominate role as the temporary "single payor" that private insurance would have no choice but to limit the payments to doctors, hospitals and drug companies. After many years of general economic inflation while holding medical payments down could we then could see our medical costs drop into the low teens of GDP.

Anyway you look at it we cannot stay on the path we're on.

[corpstrat]

McKinsey
Dew, It is almost certainly quixotic for me to try this with you but ...
As a recovering McKinseyite myself, I recognize simplistic use of perfect-market ways of thinking by very bright people with time on their hands where they don't fit the market reality.

Health care is not and never can be a perfect market. Not one of the important conditions for perfect markets to work is met - information symmetry between buyer and seller, buyer using own money, buyer unemotional, commodity substitutable product, many sellers with no cartel operation possible, and others that I'm surely forgetting. Micro 101.

Market chatter about health care is thus self-serving / special pleading ideology from the vested interests of providers and intermediaries. McKinsey serves some of these players, so will not come out clearly for an NHS-style solution, which is what the characteristics of health care cries out for, even though McK will sometimes allow the facts to lead them in that direction a bit. (Now I'd better glance through their latest report!)